The unfair dismissal trends your business needs to know

Unfair dismissal is no joke. After several years, the Fair Work Commission has created a nice package of cases that define employment law pretty clearly for any business paying attention. The result? A system in which you can absolutely sack someone – but if you don’t play exactly by the rules, it’s going to be very tough.

And painful. It might even be getting worse for employers.

Over the past few years, there have been hundreds of unfair dismissal cases heard before the Fair Work Commission. Here are just a few that illustrate just how important key procedures are in a business – and some of the newer trends in unfair dismissal that all businesses need to be aware of.

Process matters

Employment law experts say they’ve noticed the Commission now emphasises procedure a lot more than it used to. You might even have the worst employee in the world, be justified in letting them go, but if you’ve mucked up one small step along the way, then prepare to suffer the consequences.

“When cases are being examined by the Commission, they’re looking loosely for what the employer does to bring the conduct to the attention of the employee,” says Rachel Drew, partner at law firm Holding Redlich.

“One of the basic points of unfair dismissal is that you need a good reason, and you have to follow a process. But we’ve seen some claims lately where you think the reason is enough, but it won’t be – the Commission emphasises the process.

Szentpaly was hired by Basin Sands to work a loader on a mine site. He completed a 12-hour shift but then finished the shift early due to problems he had experienced with the loader. The next morning, he was asked why so few loads had been completed. The employee replied he had assumed the company had been aware of the problem.

It’s a complex case, but while the Commission found that the company may have had a valid reason to terminate the worker’s employment, he wasn’t given proper time to respond to the allegations.

That cost the company, which was forced to pay nearly $8,000 in compensation.

These types of cases are becoming more common, says workplace lawyer Peter Vitale.

“There continues to be a strong focus on process,” he says.

But Vitale adds a caveat that he says could be quite dangerous: employees are now beginning to use unfair dismissal laws against their employers.

Vitale doesn’t mean an employee rightfully defending themselves under the law. Instead, he says employees who have knowingly done something wrong are beginning to understand how to use the emphasis on process to turn the tide against their boss.

“There is an increase in the range of cases which involve unusual circumstances, in respect of the employee…with a lot of cases centred on personality conflicts in the workplace,” he says.

“I think in a lot of these cases we’re finding that the Commission is, in the absence of tangible conduct to fix on, such as unsatisfactory performance or behaviour … there needs to be a focus on procedure.”

For example, Vitale says, a business may put an employee under a performance management program and then the employee responds with bullying accusations, which can develop into claims of workplace-related distress.

While these can often be legitimate claims, Vitale says employees are sometimes using these to their advantage.

“There is a willingness by employees to … take this approach,” he says.

Social media still on the radar

There also continues to be an emphasis on social media and digital communication in the Commission’s ruling, says Drew, especially those communications made outside of work hours or the workplace itself.

“There is a very strong trend that even if social media might be occurring outside of employment, it’s something that can impact on the reputation of the employer,” Drew says.

“Even if you have your privacy settings on, there are groups of people within your Facebook friends who are seeing what you’ve written, and they can identify you as an employee of the business – that’s taken into account.

“Employees can’t just rely on privacy settings.”

Be consistent

One of the most frustrating problems for a business is legacy knowledge: being able to recall how exactly you’ve responded to past events.

That can be a problem when dealing with unfair dismissal. In 2014, the NSW Industrial Relations Commission reinstated a public servant after it was found he was treated more harshly than another colleague for the same behaviour.

During a Christmas party, one employee admitted to groping the breasts of several colleagues. But another colleague who was also allegedly involved in sexual harassment was only demoted, whereas the first employee was sacked.

“Consistency in penalties is so important,” says Drew.

“Employers need to have a very sensible and cogent approach about conduct. Sometimes it can be an emotional decision … but it has to be done fairly and objectively.”

The Uber driver

With the rise of “side-gigs” as a legitimate form of income, more workers are earning extra cash by renting out a room through Airbnb, freelancing or even driving an Uber on the side. And it’s only going to be more important for employers to judge how they treat employees who are working with multiple jobs at the same time.

Of course, it doesn’t work out for everyone.

In Perth, a worker at a newspaper printing facility was sacked after his employer found out about his Uber side gig. The employee wasn’t given permission to undertake the second work, in breach of his employment agreement.

The case has clear ramifications for employees hoping to do side work of their own, but Drew says it has ramifications for businesses as well. As this issue becomes more common, she says, businesses need to know how they’ll deal with it – and the answer isn’t always clear.

“If you’re a part-time receptionist and you work Monday to Tuesday, it’s difficult to see how there could be conflict if you have another job on Wednesday and Thursday,” she says.

“However, if you are a full-time employee and you’re driving Uber after hours, your employer is entitled to ask questions about that and it’s entitled to reach a conclusion about whether that employment is consistent with whatever you’re doing.”

However, Drew says employers need to be wary about approaching any extra employment as a breach of an employment agreement. It depends on the circumstances, she says.

“One thing they can take into account is if you’re driving an Uber until midnight, for instance, and if that leaves the person too tired to do their job.”

“But if they’re only working until 8pm, you would have a harder time suggesting those extra hours of work genuinely interfere with the day job. It all depends.”

Adopt policies for the future

In another example of businesses maintaining poor policies, one case in 2014 involved an employee who had to leave work to attend a hearing related to domestic violence.

The employee had previously been warned about taking unauthorised leave. But because she was embarrassed to mention the issue, she had only told a few colleagues and her immediate supervisor.

One hearing the employee was mandated to attend suffered a time change. But the employee didn’t tell her superiors, and went anyway. This unauthorised leave led to her sacking.

Once again, the Commission found the company was at fault for not giving the employee proper time to respond.

While Vitale says the case shows how important it is to maintain clear procedures, he also says businesses need to start thinking about how they develop policies to respond to these types of cases.

Consideration in the workplace of domestic violence is a relatively new issue to be formalised and many businesses haven’t even started. But Vitale says this will only become a more important issue, and businesses need to get started now.

“To some extent, this case at its core is about the employer not taking an appropriate procedural approach to an employee who was unauthorised leave,” says Vitale.

“But it also reflects a failure on a broader front, and it highlights the law.

“The courts are meant to reflect community values, and I think what it illustrates is that community values now hold that employers should be considerate of employees who have these circumstances in their lives.”

SmartCompany is the leading online publication in Australia for free news, information and resources catering to Australia's entrepreneurs, small and medium business owners and business managers.

Monday to Friday, SmartCompany.com.au publishes news, business trends and ideas from around the world, profiles and features, as well as all the latest business, tax, legal, marketing, politics and innovation developments occurring around the country.